CVR Partners (UAN) recently issued preliminary 2026 capital spending guidance of US$60 million to US$75 million, highlighting projects aimed at plant reliability, higher utilization, ammonia capacity expansion, feedstock flexibility, water quality, and diesel exhaust fluid production.

The capex announcement follows a period of strong momentum, with a 30 day share price return of 15.56% and a 1 year total shareholder return of 65.22%. Over 5 years, the total shareholder return is a very large multiple of the initial investment.

If this kind of operational upgrade story interests you, it could be a good moment to widen your watchlist with fast growing stocks with high insider ownership.

With an intrinsic value estimate implying a roughly 37% discount to the current US$108.59 unit price and a 5 year return that is a very large multiple, you have to ask yourself: is there still a buying opportunity here, or is the market already pricing in further growth?

Price-to-Earnings of 9x: Is it justified?

On our numbers, CVR Partners trades on a P/E of 9x, compared with peer and industry averages that sit much higher at 15x and 25x respectively.

The P/E ratio compares the current unit price to earnings per unit and is a quick way to see how much investors are paying for each dollar of profit. For a nitrogen fertilizer producer like CVR Partners, earnings can be sensitive to commodity prices, utilization rates, and feedstock costs, so the multiple often reflects how durable the market considers current profits to be.

Here, the P/E of 9x is described as good value relative to peers, which suggests the market price is not assigning the same earnings multiple as comparable companies. That sits alongside our DCF view that UAN at US$108.59 trades below an estimated fair value of US$172.10. In this case, both lenses currently point in the same direction.

Against the broader US Chemicals industry average P/E of 25x, UAN’s 9x looks meaningfully lower. This implies a wide valuation gap compared to the sector. If the earnings profile and quality remain comparable to peers, that discount may stand out to investors who focus on relative valuation.

Result: Price-to-Earnings of 9x (UNDERVALUED)

However, you also have to weigh risks such as potentially weaker fertilizer pricing or lower plant utilization, which could pressure earnings and challenge the current valuation gap.

Another View: What If The Market Is Roughly Right?

Our DCF model points to a fair value of US$172.10 per unit, which sits well above the current US$108.59 price and suggests UAN could still be undervalued. If those cash flow assumptions prove too optimistic though, how much of that apparent gap would really remain?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CVR Partners for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 877 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own CVR Partners Narrative

If you look at the numbers and come to a different conclusion, or simply prefer to test your own assumptions, you can build a custom view in just a few minutes with Do it your way.

A great starting point for your CVR Partners research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

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• Target potential value by checking out these 877 undervalued stocks based on cash flows, where companies are filtered using cash flow based metrics that some investors prioritize when hunting for mispriced opportunities.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.